Red Door Spas is taking the guesswork out of guest work.

Visitors to its day spas and salons are consumers who seek a relaxing day of pampering and personal revitalization. To meet the service expectations of its clientele — and operate the fast-growing business efficiently — parent company Red Door Spa Holdings relies on enterprise resource planning solutions.

Red Door Spa Holdings operates more than 50 wholly-owned freestanding and resort-based day spas and salons and employs about 4,000 people, mostly technicians who provide services to guests.

CIO Paul Kaczmarek says the company is aggressively expanding its retail footprint, growing at a rate of about 20 percent annually since 2004. The company also is pressing forward with ambitions for international expansion in 2009.

Technology is the driver for Red Door’s growth, Kaczmarek says. The company joined with Walldorf, Germany-based SAP for enterprise resource planning development, swapping out its antiquated and characteristically manual processes that lacked economies of scale over the past two years.

Enterprise resource planning (ERP) seeks to integrate all corporate divisions and functions onto a single computing platform that still gives departments the flexibility to serve their unique needs. SAP for Retail powers business process management applications through modules on its service-oriented NetWeaver platform.

Under its former system, expansion meant adding corporate technology staff, leaving Red Door in the untenable position of having its growth blunted by escalating personnel costs.

“For us to open up a day spa is a significant investment,” Kaczmarek says. “We see technology as a driver for our growth: Internally, we call it our ‘chassis.’ We have this support chassis that we are building so that, as we grow, we don’t have to add corporate support. We think we’ve built an infrastructure now so that using technology we can grow the business without having to grow the support structure.”

SAP for Retail is designed to allow retailers to be nimble in exploiting business processes throughout their enterprise while creating customer experiences that motivate shoppers to buy — and return. The platform supports functions that include demand management, merchandise management and planning, store operations, finance and human resources.

AMR Research notes that fast growth in the $30 billion-plus worldwide market for ERP applications is being fueled largely by mid-market companies positioning themselves to compete in the global market or source products globally.

Global business issues demand that companies configure new computing systems as older processes lack compatibility with global demands, and ERP providers are riding this wave to the tune of market growth that is averaging 15 percent annually.

Similar skill sets to operate
For mid-market firms like Red Door, the objective is to streamline operations and manage profitable growth, says Andrea France, SAP’s Chicago-based retail industry principal. Each of SAP for Retail’s functional areas requires “the same skill set to operate the business. There are not different technologies that come into play.

“There’s a much lower TCO [total cost of ownership] to run this because, no matter what module you’re in or the piece of software you need to deploy … it takes the same skill sets in IT because the software runs on the single NetWeaver platform.”

Kaczmarek says the chain is particularly engaged with new functionalities in customer service and product management. A paperless reservation system incorporating POS processes now commands guest scheduling, and replenishment of salon products like creams, fragrances and other goods are based on sales, forecasting and other standard retail metrics.

“We’re not the kind of place where you go in and they’ve got the big old day planner book with all the technicians’ names listed up and down,” Kaczmarek says. “Everything is electronic, so when the guests check in, it is easy for them. When they check out, we know exactly what’s been done with them while they have been in the spa for the day.”

The system allows salon personnel to understand the precise service interests of customers — whether it’s a Swedish massage, nail care or make-up. Customer profiles give personnel the opportunity to market the salon’s products and services through personalization.

“We have flags in our system that say, ‘This is Mrs. Smith. She’s a highly valued guest. When she comes in, she likes to have green tea and crackers,’” Kaczmarek says.

SAP for Retail also ensures that Red Door is able to maintain products on salon shelves through automated replenishment from its warehouse and distribution points using RFID technology for cycle counts, picking, receiving, put away and bin transfers.

The ERP system keeps the lines of communication open among various parts of the business. When a guest is checking out, the associate can say, “‘Mrs. Smith, I see you were with David and he recommended those three products. Can I get those for you?’” Kaczmarek says.

“If we can’t give them what they had during their treatment, then we’ve missed an opportunity from a business perspective,” Kaczmarek says.

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